The sector is already booming: copper surged to a record in May, cobalt is climbing, and lithium prices are at the highest ever. Miners haven’t been able to keep up with demand and supply for key commodities is likely to be constrained by years of underinvestment, depletion of easy-to-extract reserves, and concerns that range from environmental impacts to geopolitical tensions.
It’s hard to find long-term, high-quality resources, Li said. Miners are also more cautious with their capital expenditure after a previous commodities boom gave way to an extended downturn, he said.
The length of copper’s bull market will depend on the pace of the clean energy transition, Li predicted. Concerns about an energy crisis in China as well as ructions in the nation’s property market that previously roiled the copper market are easing, he said.
Other views from Li include:
- Markets outside of China are becoming increasingly important for the industry. “In the past 10 to 15 years, China’s rapid economic growth has been a key driver for metals consumption. It’s important still, but don’t underestimate the demand outside of China.”
- “The lithium market is very hot, which means people are positive about the sector, and so are we,” Li said, adding that the company is also monitoring related opportunities but will wait and remain disciplined. “After two or three years, whether this market enthusiasm and prices are sustainable is still a question mark.”
- The company is also tracking opportunities for global metal resources, including aluminum.
(By Annie Lee)